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******************************************************** ART OF RECORDING OF STATEMENT OF ASSESSEES/WITNESSES **********************"***************†****************** The statements recorded of witnesses and assessees have evidentiary value and can be utilised by the Assessing Officer in framing assessments as well as during Survey and Search & seizure operations for extracting substantive information. The recording of statement is an art and the skill of the Officer taking statement, will determine the extent to which he has been successful in extracting information from the witnesses/ assessees without travelling beyond the four-corners of law. The statements are recorded u/s 131, 132, 133A, 143 and in penalty proceedings. The assessee also may like to adduce oral evidence, u/s 142, 144A, 154, 171, 221, 263, 274 and also u/s 68, 69, 69A, 69B, 69C etc. As oral evidence assumes great importance in deciding controversial issues, it is necessary for the Assessing Officer to go through these statements and draw appropriate conclusion. This shows Assessing Officer expertise in the art of cross examination. These points, however, are not exhaustive, It all depends on nature of case, evidence in possession of AO and use of that evidence documentary or circumstancial. In addition, to the following points, there may be other points of prime importance. These are only general in nature: 1. The Assessing Officer has to correctly identify the person whose evidence he is recording. (It should not be a case of impersonation). 2. The Assessing Officer must be clear whose witness the person examining is-assessee's or department's and examination, cross-examination and re-examination has to be done accordingly 3. Statements recorded must reflect adequate preparation by the Assessing Officer on the subject. Relevant questions relating to subject should be raised to arrive at conclusion. The question should not left out if concluding answers either positive or negative is not found. 4. Summons/notices must be correctly served for the purpose of examination / recording statements. The whole purpose will be vesciated in the case of Summon/notices not served correctly. 5. The oath must be correctly administered before recording the statement and where witnesses / assessees refused to bind themselves by oath / affirmation such fact of refusal must be recorded and penal consequences thereof is required to be communicated to the witnesses / assessees. Similarly, where a statement is refused to be signed, such refusal has to be recorded and penal consequences must be communicated and required to be recorded thereto. 6. The documents relating to witnesses are to be used in statements or later in assessments-they must be identified properly in the course of examination of the witnesses/Assessee with identification no., page no. & point no., If any. 7. The Assessing Officer before concluding the examination of the witnesses/assessee should allow him a final opportunity to amplify, supplement, contradict or clarify points raised by the Assessing Officer during the course of examination. 8. When the statement has been concluded it is required to be mentioned i.e. who has examined the witnesses, who has cross-examined him, who were present, whether statement is read over in the language known/understood by the witness, the statement should be true to his knowledge and belief, whether it is voluntary having been given without any threat or inducement, and whether it has been signed by the witness; his counsel, and by the Assessing Officer. 9. The Assessing Officer must not put unnecessary questions e.g. those relating to the private life of the witnesses /assessees which were of no relevance should not be asked. 10. The Assessing Officer should not indulged in unnecessary arguments on the interpretation of law or on facts or in respect of the issues admitted or confirmed by the assessee or on facts which are sufficiently proved by the material on record. (The AO should be discouraged in undertaking such purposeless exercise during cross examination). 11. The AO has to ask direct questions in simple language understood by the witness/Assessee he shuold not waste time by putting irrelevant questions and getting circumlocutory and confusing replies. 12. The AO is required to confront the witnesses/assessees with the apparent contradiction, if any, in the statement recorded by him and in the material available on the record so as to put the assessee witness off guard. It to be noted, where AO has framed the assessment without reconciling the contradiction apparent from facts and material available on record and the oral statement recorded, the assessment is unlikely to stand the test of appeal. 13. The AO should not put questions which are insulting annoying and intimidating. 14. The AO has to cover the chain of events and synthesised the missing links in the course of examination of the witnesses / assessees. 15. The corrections/cuttings on the statements have to be signed by the witnesses / assessees. 16. The AO has to record the questions disallowed by him and reasons for disallowing the questions. 17. The AO is required to give a certified copy of the statement to the assessee on his request. (copy of the statement is not to be given to the witnesses). 18. It is to be noted a witness summoned has no right of representation by counsel. During recording of the evidence, it is open to the Assessing Officer to refuse assistance of a counsel during such examination as was held in. V. Datchinamurty v. Asst. Director of Inspection, (Intelligence) [1984] 149 ITR 341 (Mad) and reiterated by the Supreme Court in a central excise case in Poolpandi v. Superintendent, Central Excise [1992] 62 Taxman 447 19. Further, a deponent on oath has right to read over before affixing his signature and clarify any matter by his own note while signing. Such right should always be allowed to be exercised. If any statement is incorrectly recorded or any correction or clarification is not agreed to be recorded, such correction or rectification should be made immediately, thereafter. Witness who signs the statement is presumed to be present throughout the proceedings.

20. Generally speaking oath is a solemn declaration or undertaking after naming God. Apart from being a judicial act, oath is a religious act by which a party invokes God to not only witness the truthfulness of his statement but also to punish his perjury if he is found to be guilty of it. Further, it would be relevant to point out that under section 181 of the Indian Penal Code for giving false statement on oath or affirmation to a public servant or to a person authorized to administer an oath or affirmation, imprisonment of up to 3 years is provided. As explained by the Bombay High Court in the case of RR Gavit v. Smt. Sher Banoo Hasan Daya [1986] 161 ITR 793/28 Taxman 349, outcome of non-administration of oath would be that the prosecution for perjury as provided under section 181 or under section 193 of the Indian Penal Code will not stand. It has to be appreciated that if under the Oaths Act, 1969 or under any other law there was no provision for recording statements on oath, the persons being examined would have had the tendency of not telling the truth.

21. The Survey authorities do have power to take statement u/s133A(3)(iii). But this statement, as generally considered, cannot be statement on oath. (To be discussed in details on this issue later in this article). There is difference between statement and statement on oath. A statement made on oath would have more sanctity than the statement made other wise than on oath. In the search provision 132(4) special powers have been given to take statement on oath. As per section 7 of the oaths Act also there is requirement that for administering the oath the proceeding should be judicial. Hence it has to be considered if the authority was empowered to administer the oath and whether it was judicial R. R. Gavit.vsSmt. Sherbanoo Hasan Daya And Another. (161 ITR 793, 55 CTR 427, 28 TAXMANN 349). The Kerla High Court in Paul Mathews & Sons 263 ITR 101 has held that survey authorities do not have power to record statement on oath. Moreover mere statement without the corroborative evidence cannot be made basis of the assessement. ACIT vs Satya Narayan Agarwalla (91 TTJ 481- Cal), Abdul Qaymme vs CIT (184 ITR 404 Allh). So it utmost important to gather the corroborative evidence before taking statement and ask the related question. This will yield the result and can be made basis of addition and assessment. It is again reiterated that due care has to be taken while taking the statement. This statement can be used against the assessee during the assessment unless the assessee proves that the statement was recorded under undue influence, coercion or threat. So it must be specifically mentioned that such undue influence, coercion or threat were non existance during recording of statement. 22. However, while taking statement under section 131(1), even related to survey, a statement can be recorded on oath because the powers to record a statement on oath are definitely vested in the authorities under section 131(1). It is possible during the survey only if the Assessee does not cooperate during survey as condition laid down in section 133A(6). when an assessee does not afford facility to the Income Tax authority etc. or person refuses or evades to co-operate during the survey. 23. Statements of third party: If certain additions are made on the basis of statement of certain witnesses or third parties during the course of survey or in assessment proceedings, an adequate and proper opportunity for cross-examination of witnesses / third party should be given to the Assessee [CIT v. Land Development Corpn. [2009] 316 ITR 328 (Kar.) ]

24. Retraction of statement by Assessee:- Statements recorded by in course of search/survey are many a times retracted by the assessee on the ground that the same has been obtained by pressure or undue influence. However, once a statement has been recorded, the retraction of statement has no value unless and assessee proves how it is not valid statement. 24.1 The following points needs to be considered: a.&#61623; Retraction should be made at earliest point of time. If this is not done, a case may be made out that by not making the retraction at an early stage, the assessee has stopped the Investigation Wing to carry on the investigation and to collect the evidence against the retraction. Hon’ble Ahmadabad Bench in case of Kantilal C. Shah Vs. ACIT 62 DTR 385 has held that retraction of statement made u/s 132(4) is not permissible after considerable time has elapsed. b. Retraction should be supported by convincing and effective evidence through which assessee could demonstrate that the statement initially recorded was factually incorrect. So precautions are required while taking statement to plug such incidence to be mis utilised by the Assessee. c. Generally, it is presumed that whatever is stated at the time of recording of preliminary statement u/s 132(4) is true and correct. Thus, whenever assessee pleaded that the statement has been obtained forcefully/ under coercion/undue influence/without material/contrary to the material then it should be supported by strong evidence. &#61623;d. It is also to be noted here that Statement recorded u/s 132(4) at odd hours cannot be considered as voluntary statement if it is subsequently retracted and necessary evidence is laid contrary to such admission as held by Gujarat High Court in case of Kailash Ben Manbhar Lal Choksi Vs. CIT 328 ITR 411. 24.2 No Confession can be extorted:- Instances have come to the notice of Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of search and seizure and survey operations. It has been advised to all Chief Commissioner’s and Director General of Income-Tax that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. The CBDT vide letter F.No. 286/98/2013-IT (Inv.I1) dated the 18th December, 2014 directed the same.through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admision of undisclosed income under coercion/undue influence. Earlier with Reference to: 1) CBDT letter F.No. 286/57/2002-IT(Inv.11) dt. 03-07-2002 2)CBDT letter F.No. 286/2/2003-IT(Inv.II) dt. 10-03-2003 3)CBDT letter F.No. 286/98/2013-IT(Inv.11) dt. 09-Q1-2014 had also instructed the same. It is also advised that while recording statement during the course of searchand seizure, no attempt should be made to obtain confession as to the undisclosed income. Further, in pending assessment proceedings, AO should rely upon the evidence/material gathered during the course of search/survey operations or thereafter while framing the relevant assesmsment orders. Thus, power to record a statement has not been diluted. What is discouraged is forced confession of undisclosed income. 25. The recording of statement may be followed with necessary enquiries to support or contradict the factual information obtained during the course of examination / re-examination and to be used in the assessment proceedings and finally to the Assessment Order. It must be crystal clear that While utilising oral evidence, the AO has given adequate opportunity to the assessee to meet out the points proposed to be used against him.

±+++++++++++++++++++++++++++++++++++++++±+++!±+++++++++++±++++++±±± Evidentry Value of Statement taken during the Survey:- Discussion ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

There are contradictory veiws with respect to whether statement can be recorded during the survey on oath or not and the evidentry value of statement during the survey. Majority of views strictly puts bar on it and there are case laws also in this respect as already mentioned in this article. But it is still not a matter of ananimous view. It relevant to point out here that provisions of section 136 of the Income-tax Act, 1961 provides that deem proceedings before an income-tax authority to be judicial proceedings. Therefore on application of the Oaths Act, 1969 the income-tax proceedings are also be Judicial proceedings and thereby statement taken during the survey also a Judicial proceeding because a statement is taken for specific purpose to substantiate the findings by oral validation. This certainly mean that even in the absence of the specific provisions under the Income-tax Act, clearly the Oaths Act, 1969 can be resorted to, and as per the provisions of section 3 of the Oaths Act, 1969, an income-tax officer who has an authority to receive evidence, while discharging functions judicially, can record oral statements on oath. It is also to be noted here that Section 7 of the Oaths Act, 1969 clearly provides that non-administration of oath as such will not render the evidence of the person examined as useless. Therefore, Irregularity in administering the oath or for that matter, in a case no oath as such was administered despite the fact that there was a specific provision (for example, under section 131 and under section 132(4) and 133(5) of the Income-tax Act), it will not be fatal so as to render the evidence a nullity because of section 7 of the Oaths Act, 1969 which clearly provides that proceedings and evidence cannot be invalidated because of omission of oath or irregularities in administering the oath. In view of the above, it is felt that it is not a valid argument to say that in the absence of specific power conferred under the Income-tax Act, 1961, statements on oath cannot be taken during the survey also. Now, in such a case the Judgement given in the case of the Division Bench of the Kerala High Court in Paul Mathew & Sons case (supra) is required to be considered respectfully in which it is held that statement recorded under section 133A is not accorded evidentiary value for the reason that officer is not authorized to administer oath and to take sworn statement, which alone has evidentiary value as contemplated under law. Here it is important that provisions of oath was only considered with respect to Income tax act regarding oath and evidentary value. It is submitted respectfully that it would not have been so if the provisions of the Oaths, Act, 1969 had been brought to the notice of the High Court. Provisions as 133A(iii) reads as under: “(3) An income-tax authority acting under this section may, (i), (ii) ** ** ** (iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act.” If the statement is recorded during survey under section 133A(3), there is a presumption that it is recorded because it is found to be useful or relevant to the proceedings under the Income-tax Act. When at the time of recording of the statement, it is found expedient or useful, to say that it cannot be used subsequently will be an erroneous interpretation and would be against the spirit of the very provision under which statement is recorded. Likewise, to say that such a statement recorded in survey cannot have evidentiary value because it cannot be recorded on oath just because section 133A does not provide for oath whereas provisions of section 132(4) and section 131(1) provide so, is also not the correct interpretation because, as discussed, under the Oaths Act, 1969 even if there was no provision under the Income-tax Act oath could have very well been administered. It is further felt that when the statement during survey under section 133A(3) is also recorded on the spot like in the case of a search under section 132 or in the case of a marriage survey, etc. under section 133A(5), it will also be as contemporaneous as would be statement recorded in a search under section 132 or in a marriage/function survey, etc. under section 133A(5). Accordingly survey statements recorded under section 133A(3) also will be equally effective. Just because section 132(4) or section 133A(5) enable the statements recorded thereunder to be used ‘in evidence’, it cannot be said that other statements will not at all have evidentiary value. In this connection, it will be useful to refer to a decision of the Jaipur Bench of the Tribunal in the case of ITO v. B.D. Dal & Oil Industries [1992] 40 ITD 180 (Jp.) wherein it was held that: “...If at the time of survey an assessee himself conceds that the stock are short and even comes to an agreement regarding the extent of shortage, in our opinion, unless it can be established that such consent or agreement was given or arrived at under threat, coercion, undue influence, mis-representation or wrong understanding of facts or law, it would bring all efforts put in survey operations would come to naught if the assessee are allowed to retract from whatever they had stated or agreed to at the time of survey....” Considering the fact that all the exercises carried out whether under section 131 or under section 133A(3) or under section 133A(5) or under section 132(4) are aimed at obtaining or collecting evidences of the nature of clarifications or admissions, it will not be correct to assign different weightage to them more so when these are contemporaneous and are recorded on the spot giving no time to the persons to fabricate or manipulate the answers. At the same time it is to be noted that none of these statements and not even the statement recorded under section 132(4) are accorded the status of conclusive evidence and they are all open for rebuttal by the makers. These become conclusive only when the makers fail to prove the incorrectness of these statements. .Conclusion From the above discussion, it is held that even by taking shelters of The Oath Act 1969 one can say that it is possible to take oath while taking statement under section 133A(iii) of IT Act but it is better to take statement without oath during general survey under section 133A because of various reasons, as narrated earlier in this article. It may be concluded that the statement can not be taken on oath in surveys as there is no express provision under the Income-tax Act, 1961 in the section 133A(iii) while the same is there in section 131, 132(4) and in section 133A(5) and also due to dcision taken in various Court cases more particularly as held in Kerla High Court in the case of Paul Mathew & Sons case. Therefore, it is better to gather the evidential value details and documents so that statement even without under outh can not be reitracted. It will also bear the evidentary values of statement without an outh and at the same time, it will also not creat unnecessary Judicial controversies.

An Act to consolidate and amend the law relating to judicial oaths and for certain other purposes.

BE it enacted by Parliament in the Twentieth Year of the Republic of India as follows:--

1.Short title and extent.

1. Short title and extent. (1) This Act may be called the Oaths Act, 1969.(2) It extends to the whole of India except the State of Jammu and Kashmir.

2.Saving of certain oaths and affirmations. 2. Saving of certain oaths and affirmations. Nothing in this Act shall apply to proceedings before courts martial or to oaths, affirmations or declarations prescribed by the Central Government with respect to members of the Armed Forces of the Union.

3.Power to administer oaths. Power to administer oaths. (1) The following courts and persons shall have power to administer, by themselves or, subject to the provisions of sub-section (2) of section 6, by an officer empowered by them in this behalf, oaths and affirmations in discharge of the duties imposed or in exercise of the powers conferred upon them by law, namely:-- (a) all courts and persons having by law or consent of parties authority to receive evidence; (b) the commanding officer of any military, naval, or air force station or ship occupied by the Armed Forces of the Union, provided that the oath or affirmation is administered within the limits of the station.

(2) Without prejudice to the powers conferred by sub-section (1) or by or under any other law for the time being in force, any court, Judge, Magistrate or person may administer oaths and affirmations for the purpose of affidavits, if empowered in this behalf--

(a) by the High Court, in respect of affidavits for the purpose of judicial proceedings; orÚ

(b) by the State Government, in respect of other affidavits. -------------------------------------------------------------------- The Act shall come into force in the State of Sikkim on 1.9.1984 vide Notifn. No. S.O. 649(E), dt. 24.8.84 Gaz. of India Pt. II Sec. 3(ii). Exty.

4. Oath or affirmations to be made be witnesses, interpreters and jurors. 4. Oaths or affirmations to be made by witnesses, interpreters and jurors. (1) Oaths or affirmations shall be made by the following persons, namely :--

(a) all witnesses, that is to say, all persons who may lawfully be examined, or give, or be required to give, evidence by or before any court or person having by law or consent of parties authority to examine such persons or to receive evidence;

(b) interpreters of questions put to, and evidence given by, witnesses; and

(c) jurors:

Provided that where the witness is a child under twelve years of age, and the court or person having authority to examine such witness is of opinion that, though the witness understands the duty of speaking the truth, he does not understand the nature of an oath or affirmation, the foregoing provisions of this section and the provisions of section 5 shall not apply to such witness; but in any such case the absence of an oath or affirmation shall not render inadmissible any evidence given by such witness nor affect the obligation of the witness to state the truth.

(2) Nothing in this section shall render it lawful to administer, in a criminal proceeding, an oath or affirmation to the accused person, unless he is examined as a witness for the defence, or necessary to administer to the official interpreter of any court, after he has entered on the execution of the duties of his office, an oath or affirmation that he will faithfully discharge those duties.

5.Affirmation by persons desiring to affirm.

5. Affirmation by persons desiring to affirm. A witness, interpreter or juror may, instead of making an oath, make an affirmation.

6.Forms of oaths and affirmÑations.

6. Forms of oaths and affirmations. (1) All oaths and affirmations made under section 4 shall be administered according to such one of the forms given in the Schedule as may be appropriate to the circumstances of the case:

Provided that if a witness in any judicial proceeding desires to give evidence on oath or solemn affirmation in any form common amongst, or held binding by, persons of the class to which he belongs, and not repugnant to justice or decency, and not purporting to affect any third person, the court may, if it thinks fit, notwithstanding anything hereinbefore contained, allow him to give evidence on such oath or affirmation.

93.(2) All such oaths and affirmations shall, in the case of all courts other than the Supreme Court and the High Courts, be administered by the presiding officer of the court himself, or, in the case of a Bench of Judges or Magistrates, by any one of the Judges or Magistrates, as the case may be.

7.Proceedings and evidence not invalidated by omission of oath orirregularity.

7. Proceedings and evidence not invalidated by omission of oath or irregularity. No omission to take any oath or make any affirmation, no substitution of any one for any other of them, and no irregularity whatever in the administration of any oath or affirmation or in the form in which it is administered, shall invalidate any proceeding or render inadmissible any evidence whatever, in or in respect of which such omission, substitution or irregularity took place, or shall affect the obligation of a witness to state the truth.

8.Persons giving evidence bound to state the truth.

8. Persons giving evidence bound to state the truth. Every persons giving evidence on any subject before any court or person hereby authorised to administer oaths and affirmations shall be bound to state the truth on such subject .... .......... ***************"*******************************†********************"***

******************************************************************************************************************************************** Disclaimer: The contents of the discussion in this article made by me are solely for informational purpose. It does not constitute professional advice or a formal official/departmental recommendation. While due care has been taken and in future it will be taken in discussion, the existence of mistakes and omissions herein is not ruled out. Neither me nor any member of the group and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document/discussion nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use).

Sir Very useful for me specially point no. 8 and 18. Please also suggest reg. point 18 that if a counsel of assessee (not of witness) wishes to be present during the proceeding of recording statement, it is his right or AO's discretion..
Thanks

Thank you very much for your appreciating words.
Sir as per my view there is no express provisions in this respect but generally they are not allowed to enterfare in the survey/search work so there presence at time recording of statement during survey/search may be denied. The assess can not insist that survey be started after arrival of their counsel. In addition to this the counsel are also not allowed to represent while enforcing section 131 for personal presence and taking statement thereof. Statement otherwise than this may be taken in presence of councel as they are allowed to represent case as per section 288(1). But whenever they are present normally their presence should be as that of witness afterall statement is personal statement it should not based on legal assistance and their presence must be recorded.

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